Chian Teck Realty Pte Ltd. v. SDK Consortium [2023]

[2023] SGHC 210 [Singapore]

Cases Referenced:

  • CRK Contract Services Pte Ltd. v. Asplenium Land Pte Ltd. [2015], [2015] 3 SLR 1041 [Singapore]
  • 1L30G Pte Ltd. v. EQ Insurance Co. [2017], [2017] 5 SLR 1106 [Singapore]
  • Arab Banking Corp. v. Boustead Singapore Ltd., [2016] 3 SLR 557 [Singapore]
  • Sembcorp Marine Ltd. v. PPL Holdings Pte Ltd., [2013] 4 SLR 193 [Singapore]

Related Litigation:


Type of Lawsuit: Applicant sought injunction against Guarantor and performance bond Beneficiary.

• Subcontractor/Applicant - Chian Teck Realty Pte Ltd.
• Guarantor - Lonpac Insurance Bhd
• Contractor/Beneficiary - SDK Consortium

Underlying Transaction: Performance Bond to support work obligation.

LC: Performance Bond for SGD 1,123,152.55

Decision: The High Court of Singapore, Lee Seiu Kin, J., granted the injunction in so far as concerned the 29 July 2022 demand.


To support its work obligations, Chian Teck Realty Pte Ltd. (Subcontractor/Applicant), a Singapore reinforced concrete and precast specialist, applied for and caused Lonpac Insurance Bhd (Guarantor) to issue a SGD 1,123,152.55 performance bond in favour of SDK Consortium (Contractor/Beneficiary), the main contractor for a construction project (and consortium of three engineering companies). The bond value constituted 5% of the subcontract value and no practice rules were mentioned. The subcontract contained a clause stipulating that demands on the bond could not be restrained on the basis of unconscionability.1 (para.3).

A few years into the project,2 the relationship between the parties “deteriorated”. There were disputes regarding both performance of work as well as payment certifications. Subcontractor/Applicant later served a contract termination notice on Contractor/Beneficiary claiming it unilaterally reduced the scope of work and falsely accused Subcontractor/Applicant of performance delays. Contractor/Beneficiary’s first demand for payment was made 29 July 2022. Preceding the demand, Guarantor sent a letter to Contractor/Beneficiary in April 2022 informing that the bond would not be extended. While Contractor/Beneficiary claimed that it did not receive the April notice, it was undisputed that Contractor/Beneficiary received a second notice sent 19 July 2022.

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